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Phalen and Como golf courses will likely see a private partner next season

Golfers get in an early fall game out at Phalen Golf Course. The City of St. Paul will look for a private partner for the Phalen and Como Golf Courses. (Linda Baumeister/Review)

Bostrom opposes move to privatize municipal course

Patrick Larkin
news editor

If all goes according to plan, St. Paul Parks and Recreation will find a private partner for Phalen and Como golf courses in time for the 2014 golf season.

The St. Paul City Council voted on Wednesday, Nov. 6, to let the parks department go forward with a drafting of a request for proposals.

The measure passed by one vote -- three of seven council members, including East Sider Dan Bostrom, voted against moving forward with an RFP, while the other four voted in favor.

The next step is for parks to present the city with the RFP document itself. If the council approves the RFP, the parks department can start accepting proposals.

The move to find a private partner comes after years of the courses operating in the red.

Brad Meyer, spokesperson for St. Paul Parks and Recreation, said the city-owned golf courses were once self-sustaining, but since 2008 the four courses have gone a total of $5 million into the red. The city needs to take action, he said.

Meyer called the move to find a private partner “kind of a last resort,” after the parks department tried to readjust and make up for the courses lost revenue.

The move to find a private partner came only after a three-year-long effort to fix the golf courses’ financial woes, under the “Compete St. Paul” ordinance, Meyer said. The ordinance requires that underperforming, non-essential city services be assessed and changed to try to fix the problem.

Phalen and the other city-owned courses have dipped into the city’s special funds pool for revenue support, Meyer said. “That pool is in effect dried up,” he said.

Concerns over Phalen

To see the East Side’s Phalen Golf Course in financial distress has raised concern among residents, city council members, and the Payne-Phalen community council. It’s has a long history on the East Side.

Nestled along the shoreline of Lake Phalen, it was first established in 1917 and has been the home to golfing families for decades. It’s considered by many to be a treasure. The fairways are lined with century-old oak trees that run along an old streetcar track and compliment the well-manicured greens and tee boxes.

The 6,100-yard golf course has seen several improvements, and today the par 71 layout is considered one of the top-flight municipal golf courses in the state.

Dan Bostrom, who represents Ward 6, where Phalen Golf Course is located, opposed the move to go ahead with an RFP, suggesting it’s too soon to find a private partner.

“I think we’re flying by the seat of our pants,” he said. “There are so many unanswered questions that I think need to be answered.”

He noted that Phalen accounted for about $178,000 of the city golf program’s deficit spending last year, with Como being somewhere around $250,000.

“I don’t get how privatizing those two courses is going to come anywhere near covering that kind of deficit,” which last year was over $1 million.

Amy Brendmoen, who represents Ward 5, where Como Golf Course sits, also expressed concern over the hastiness of the move to RFP.

But she voted in favor of going ahead with it, saying that she’s “convinced that providing golf has become too expensive.” She noted there was still time to adjust.

“We still have options to stop doing this or make another choice should the solution not be found in this RFP process.”

And if it goes through

If the RFP idea goes through, the city would negotiate with the partners to have a revenue-sharing agreement, Meyer said. The city would maintain ownership over the land and the buildings, and would still be providing winter services, such as cross-country skiing facilities.

Mike Hahm, director of St. Paul Parks and Recreation, noted at an October city council meeting that private partnership on golf is common elsewhere.

“These management models are in place and performing successfully in other places,” he said, taking Ramsey County golf courses as an example.

The bottom line, he said, is that “all four (city-owned) golf courses are losing money.”

Golf is at the far end of the spectrum in terms of programs that hold their own weight, Hahm said. “Throughout the industry, golf is expected to pull its own weight.”

Hahm told the council in October that he’d gotten a number of calls from private golf course managers. “All indications are that there’s an interest.”

Todd Hurley, who works in the city’s financial services department, noted that “golf courses across the board have lost money” last year Highland National lost about $200,000 in 2012. The city sold tax-exempt bonds to make improvements at Highland National, and because of that, it’s not possible to do a private partnership for that course until the bonds mature in 2025, he said.

But in the meantime, he said, the city needs to do what it can to stop spending money on golf.

“We can not continue to let the golf courses bleed ... to the tune of a million dollars a year,” he said.